April 27 (Reuters) – The Canadian government promised on
Friday to make its reviews of foreign takeovers more
transparent, allowing it to explain when it has concerns about a
proposed investment and perhaps even saying why.
A government statement said Canada will change the way it
reviews foreign investments, a nod to those who have complained
about opaque rules that allow the government to block takeovers
that it does not think will provide a net benefit to Canada.
“The amendments would allow the minister (of industry) to
disclose publicly the fact that he has sent a preliminary notice
to an investor that he is not satisfied that the investment is
likely to be of net benefit to Canada,” the statement said.
“They would also allow the minister to publicly explain his
reasons for sending the notice as long as it would not cause
harm to the Canadian business or the investor.”
Canada, which traditionally bills itself as open to
business, shocked the international business community in 2010
when it vetoed a takeover bid for fertilizer giant Potash Corp
from Anglo-Australian miner BHP Billiton.
That also prompted concern about what the Conservative
government would do if, for example, a foreign company bid for
BlackBerry maker Research In Motion, a major Canadian
technology company that has fallen on hard times as consumers
shy away from its smartphones.
Under the Investment Canada Act, the government can review
and block any foreign investments worth more than C$312 million
($318 million), a paltry sum in the global mergers game, if it
thinks a deal is not in Canada’s best interests.
It has exercised that right twice; once with the planned
acquisition of a satellite company by a U.S. bidder and in the
2010 bid for Potash Corp.
